337 I have already expressed the view that pars 7 and 8(b) of the Reply are broad enough to encompass both issue estoppel in the strict sense and Anshun estoppel. Furthermore, as I understand it, it was common ground that Issue 3(h) was not raised by the Commonwealth by way of defence at the arbitration; nor did the Arbitrator determine any such issue. It must, therefore, also have been common ground that issue estoppel in the strict sense simply did not arise with respect to the plea in par C30 of the Defence.
338 Assuming that his Honour accurately recorded Codock's submission in [16] of the second judgment, then apart perhaps from the last sentence, the submission appears to me to be framed in terms of an Anshun estoppel. It may well be that the last sentence of that paragraph was simply a shorthand way of referring to a submission that there was an issue estoppel in the Anshun sense: that is, an extended issue estoppel.
339 As will become apparent those submissions were made in to the context of the relevant principles relating to an Anshun estoppel which had been set out in some detail by the primary judge in the first judgment: see at [122]-[124]; [149]-[165]. Thus, at 61 of the transcript of argument of 27 July 2004 in the first hearing before the primary judge, Codock's counsel raised what he referred to as "a Henderson type extension" with respect to the "other points" he had previously addressed and which, had they been established by the Commonwealth in the arbitration, would have been an answer to Codock's claim. Because they had not been pleaded in the arbitration there was, he said, "no issue estoppel in the strict sense".
340 At 58 of the same transcript, Codock's counsel referred to "the specific issues, subject of the Agreed Statement of Issues". He then expressly referred to the expiration issue ("the post 1992 point"), submitting that it raised an issue estoppel in the strict sense "to use the phrase from Anshun" as it was "essential to the determination [by the Arbitrator] of the case in our favour". At 60, counsel referred to the "negligence point" which he submitted had been "explicitly raised and was rejected" by the Arbitrator. Accordingly, it was in the foregoing context that counsel for Codock then addressed the "other points" in terms of a "Henderson type extension".
341 In my opinion, it is apparent from the foregoing that Codock did raise the negligence issue and the expiration issue as giving rise to issue estoppel in the strict sense in the first hearing before the primary judge and that "other points" were also referred to as giving rise to an issue estoppel in the extended Henderson or Anshun sense. That was the way the case was conducted and explains the primary judge's determination of Issues 3(a) and (g) in [57] and [62] of the first judgment.
(ii) Codock's Outline of Submissions on Preliminary Issues
342 When the penultimate version of the Statement of Issues (to which I have referred in [50(a)] above) was handed up to the primary judge by counsel on 23 July 2004, Codock also presented his Honour with a document entitled "PLAINTIFF'S OUTLINE OF SUBMISSIONS ON PRELIMINARY ISSUES" dated 23 July 2004. That document addressed parts of the Statement of Issues, and made reference (in par 11) to the Arbitrator's finding to which I have referred in [290] above, it being contended (in par 12) that it was a "key finding" upon which Codock founded the issue estoppel in the present case. It was asserted that that finding was the basis for the Arbitrator's award that Codock be reimbursed with respect to the Workers Compensation Costs incurred by it both before and after 31 December 1992.
343 Under the heading "Codock's Claim in these Proceedings", Codock submitted to the primary judge (at par 13) that the basis upon which it sought entitlement to the amount claimed in the Summons was identical to its successful claim for the recovery of Worker's Compensation Costs in the arbitration
"at least insofar as the Arbitrator's Award extended to Workers Compensation Costs which were incurred by Codock after the expiry of the TAL on 31 December 1992. The claims in these proceedings arise upon the same construction of the contractual documents as underpin the Arbitrator's Award."
344 Under the heading "Analogous Authorities", Codock referred (in par 15) to Humphries v Humphries [1910] 2 KB 531 (affirmed by the Court of Appeal in [1910] 1 KB 796), and noted that that decision was referred to by the High Court in Anshun at 601. In particular, Codock cited the proposition that a defendant could not raise a plea which was inconsistent with a traversable allegation in the prior litigation. Accordingly, it was submitted (in par 18) that there was no "relevant distinction" between Codock's claim for reimbursement of the Workers Compensation Costs which were the subject of the Summons and the claim for such costs that was the subject of the Arbitrator's award.
345 Under the heading of "The Scope of the Issue Estoppel", it was asserted (at par 20) that the Commonwealth was issue estopped from raising the defences set out in Issues 3(a), (b) and (d). It was contended that if any of those defences were upheld the court would necessarily find that that the Commonwealth was not obliged to reimburse Codock for the Workers Compensation Costs the subject of the Summons, and that such a finding would directly contradict the Arbitrator's award. Indeed, so it was contended, the very arguments raised by the Commonwealth in Issues 3(a), (b) and (d) were considered by the Arbitrator and rejected by him.
346 With respect to Issue (g), it was submitted (at par 23) that the Commonwealth's defence as set out in that issue rested on an interpretation of cl 3.11 of the Standard Conditions. The interpretation contended for by the Commonwealth (that is, that cl 3.11 applied to the underlying conduct of Codock which gave rise to the asbestos related common law claims of its ex-employees) was capable of being (and was in fact) raised as an answer to Codock's claims for reimbursement of Workers Compensation Costs in the arbitration. It was then submitted that the Arbitrator's award
"necessarily, and expressly, involved a rejection of that construction. Accordingly, that contention is also the subject of an issue estoppel."
347 In par 24 it was noted that, consistent with the Arbitrator's decision, Codock accepted that if there were particular litigation costs which, through the exercise of skill, care and efficiency, would not have been incurred, the Commonwealth was not estopped from disputing liability for those costs on that basis. However, this was not the ground of dispute to which Issue 3(g) was directed. I interpolate that it is clear from these last-mentioned submissions that Codock, with respect to Issues 3(a) and (g), was contending that the relevant issue estoppel arose with respect to Workers Compensation Costs as a class.
348 It is also apparent that this was the basis upon which it was submitted to the primary judge that an issue estoppel arose relevantly in respect to Issues 3(a) and (g) and, further, that this was the basis upon which Codock sought to uphold his Honour's finding in its favour with respect to that issue on the appeal. In fact, in its additional written submissions dated 26 June 2006 on the procedural fairness issue, the Commonwealth accepted that before the primary judge Codock contended that the Arbitrator's award decided that Workers Compensation Costs as a class, were recoverable under the 1972 TAL. It was also accepted that, as a consequence, the Commonwealth's defences which denied the recovery of such costs as a class were barred by issue estoppel in the strict sense as those defences were put in issue at the arbitration.
(iii) Codock's written submissions to the primary judge
349 Issue 3(h) was also the subject of Codock's written submissions of 23 July 2004 to the primary judge. Paragraphs 21 and 22 of those submissions were in the following terms:
"21. Codock submits that the Commonwealth's contention at Issue 3(k) is governed by the same reasoning, as extended by Humphries v Humphries . If the Commonwealth contention is correct, the Arbitrator would have been wrong to award, as he did, full reimbursement to Codock for workers compensation costs (or any other overheads). The contention which is made in Issue 3(k) is thus inconsistent with Codock's claim in the arbitration. Although Codock's claim for reimbursement of overheads was not traversed in this manner by the Commonwealth before the Arbitrator, it was plainly traversable as such. Accordingly, Issue 3(k) is not now available to the Commonwealth.
22. Codock submits the same considerations apply to Issue 3(h), as with 3(k). The defence set out in Issue 3(h) would have been an answer to Codock's claim for reimbursement of at least some of the workers compensation costs which were the subject of the Arbitrator's award."
350 In my opinion, it follows from the foregoing that at the first hearing Codock contended that the Commonwealth was issue estopped, in the extended Anshun sense, from raising the defences set out in Issues 3(a) and (g), which were dealt with in the first judgment, as well as those in 3(h), which were dealt with in the second judgment.
(iv) Consent orders on the risk issue
351 The risk issue was the subject of consent orders made on 22 October 2004 that, having regard to his Honour's first judgment, there be a further hearing as to whether "such issue estoppel" extended to, inter alia, Issue 3(h). Although the Commonwealth complains that during the second hearing no mention was made of Anshun or Henderson, for reasons already canvassed, the risk issue could only have been decided by his Honour on the basis of an issue estoppel in the extended Anshun or Henderson sense.
352 The question of a further preliminary hearing to determine whether the Commonwealth was estopped in asserting defences other than those encapsulated in Issues 3(a) and (g), was canvassed at a further hearing before the primary judge on 14 October 2004. Argument then took place as to the appropriate form of order to be made following the first judgment. After discussions between counsel, Codock requested that his Honour fix a date for the hearing of an application for a preliminary determination of issue estoppel with respect to the "disputed sub-issues of Issue 3".
353 The Commonwealth submitted that if such a course was to be taken it would inevitably involve an amendment to the Reply to identify the precise issue estoppel that Codock asserted as precluding the Commonwealth from pleading the defences set forth in the Issue 3 sub-issues. His Honour then commented that par 8 of the Reply
"says specifically what it is in Codock's view of the world the Commonwealth is estopped from denying."
354 At the end of the day his Honour indicated that he would not force a hearing on further preliminary questions upon the parties without their agreement. However, as I have already noted in [351], consent orders were eventually made for such a hearing in respect of a number of the sub-issues of Issue 3 including 3(h).
(v) Further written submissions on the risk issue before the primary judge
355 Paragraph 7 of Codock's written submissions at the second hearing asserted that the Commonwealth's argument with respect to Issue 3(h) was not easy to discern but appeared to be that
"(a) some insurance premiums were accepted into overheads;
(b) such acceptance means the Commonwealth had accepted liability for the relevant liabilities for the purposes of clause 4.4.1(b)(ii) or (iv) of the Standard Conditions;
(c) therefore costs going beyond those insurance premiums (such as costs now being incurred) are excluded by clause 4.41(b) of the Standard Conditions."
356 Paragraph 8 of the written submissions then asserted that if that argument was correct, it would mean that no claim could be sustained for any of the costs claimed in the Summons or indeed for any asbestos related costs. It was then submitted that the argument would have been a complete defence to the claim before the Arbitrator.
357 The Commonwealth's written submissions in reply asserted (at par 24) that it was plainly not possible for Codock to establish that the Commonwealth maintained before the Arbitrator that the effect of the provisions of the Standard Conditions referred to in [355] above was to preclude reimbursement of some costs; or that the effect of those provisions was an issue in the arbitration; or that the Arbitrator made any determination with respect thereto. Accordingly, it was submitted that there was no relevant estoppel.
(vi) Oral pleadings on the risk issue before the primary judge
358 The second hearing took place before the primary judge on 16 December 2004. During the course of oral argument with respect to Issue 3(h), and after referring to the relevant provisions of the Standard Conditions relied upon by the Commonwealth in par C30 of the Defence, Codock submitted that the Arbitrator's finding in Codock's favour that the relevant costs were recoverable necessarily involved, as a fundamental matter, a finding that there was no other provision in the Standard Conditions which included such costs. Accordingly, there was an issue estoppel. This would appear to be the language of issue estoppel in the strict sense.
359 However, the transcript of argument reveals that Codock then submitted that the particular contention encapsulated in Issue 3(h) was not advanced by the Commonwealth before the Arbitrator but that there was
"absolutely no reason why it should not have been. It would have been a complete answer to the claim if it were correct … All the Commonwealth can point to is that this matter was not debated [before the Arbitrator] while other matters were fully debated. But, the reason it was not debated is because it was not raised by the Commonwealth. There is no reason why that was not done. If this argument was considered to have legs, then it would have been worth raising."
360 The Commonwealth submitted orally that there was no issue estoppel which operated with respect to, inter alia, Issue 3(h). As I understand the submission, it was again asserted that Codock had not specifically pleaded issue estoppel in the Reply with respect to that issue. Reference was then made to the expiration and negligence issues and the fact that they involved questions of construction. After referring to [68] of the first judgment, which I have recorded in [114] above, the Commonwealth submitted that Codock had not pleaded "any particular estoppel in the form of the one they seek to maintain today".
361 The submission continued:
"The reason we say why no particular estoppel is pleaded, is because it would be quite clearly able to be demonstrated that a finding in that form was not made by the Arbitrator - he did not make a finding - on the first basis he never found anything about the future costs, because they were expressly abandoned - but, in terms of cross-claims and I accept my friend is now not pressing it - but in terms of 4.4(2) of the Standard Conditions -."
362 The following exchange then took place:
"His Honour: A fundamental test, is it not, is whether a determination of the issues propounded by Codock and you, would, if your argument succeeded, be inconsistent with the relevant determination of the Arbitrator?
Taylor: No
His Honour: Why is it not inconsistent, but (sic) lies at the heart of the issue of estoppel?
Taylor: We say it has to be necessarily inconsistent and that is significant because -
His Honour: Accepting that qualification, we are ad idem are we?
Taylor: Yes, subject to one matter [not presently relevant]."
363 The Commonwealth's submission then continued to the effect that the four issues the subject of the hearing, which included Issue 3(h), had not been raised before the Arbitrator and were not the subject of an express finding by him. After referring to the decision in Humphries, the Commonwealth reiterated its submission that as the provisions of the Standard Conditions which were the foundation of Issue 3(h) had not been raised before the Arbitrator, the issue could not give rise to an issue estoppel. However, in response to this argument, his Honour said:
"Yes, that is why again inconsistency remains the touchstone. Only to act inconsistently to what I said, you would say that that applies to an extended estoppel as opposed to the classic estoppel?"
364 After further submissions relating to questions of pleading, the Commonwealth submitted that, in effect, Issue 3(h) was not the subject of any pleading by either party before the Arbitrator and, therefore,
"we say, if it may be that there was a particular defence available to some cost before the arbitrator, but a party did not seek to plead it in respect of that cost, but it never got ventilated as an answer in the arbitration, then it is not an issue that was before him."
365 In response, the primary judge suggested that if the Arbitrator awarded costs in respect of risks that were insured against, and in respect of which the Commonwealth had reimbursed Codock's premium costs, as part of Codock's claim upon which it succeeded, then leaving aside that they were different claims in different years
"it is an issue of general defence to a traversable allegation. It is like the pre-post December 31 issue. But, how in principle does it differ from that?"
366 The Commonwealth's response was that that matter had not been pleaded and as the Arbitrator made no findings about it, then it could not bind a future judgment about other costs. The following exchange then took place:
"Taylor: … There may be a defence [to a claim of $450 or $900], and is the defendant obliged to run every possible construction point of the TAL in answer to a particular cost, not because it is of any commercial value in those proceedings, but if, down the track, more costs are sought by the parties, that if it does it the first time, it cannot do it again? We say it is entitled to make a decision as to whether it runs those defences that it had pleaded to maintain, or not.
His Honour: But, that is the effect of the decision in Humphries and it is the principle underlying Henderson v Henderson and, indeed, Anshun . It is coming back to the defences of traversable allegations.
Taylor: Is your Honour saying that we are obliged to run that, or is it a question whether in circumstances it is reasonable for us to maintain it -
His Honour: 'Reasonable' is the question."
(vii) Did the primary judge err in respect to the risk issue?
367 In my opinion, as his Honour clearly recognised, Mr Taylor's language in the first part of the above exchange was plainly redolent of what was said in the joint judgment in Anshun at the top of 603. It is clear, in my opinion, that the Commonwealth was fully aware that what was being maintained in respect of Issue 3(h) was a Henderson or Anshun extended issue estoppel.
368 Examining the transcript of the argument I have been unable to find any evidence that Mr Taylor submitted to his Honour that it was not open to his Honour to determine Issue 3(h) upon the basis of a Henderson or Anshun extended issue estoppel because the Commonwealth was caught by surprise and had not had the opportunity of putting on evidence to establish that it was not unreasonable for it not to have raised Issue 3(h) by way of defence to Codock's claim in the arbitration. Nor was any part of the transcript on this point referred to by the Commonwealth in its written submissions in the appeal. Accordingly, in my opinion, the Commonwealth has not established that it was denied procedural fairness by the primary judge when he determined that the Commonwealth was estopped from raising Issue 3(h) in its defence to Codock's claim in the Summons.
369 The procedural fairness point notwithstanding, the Commonwealth maintained before this Court that in undertaking the balancing exercise in respect of all "relevant factors" when considering the application of the extended doctrine of issue estoppel to Issue 3(h), the primary judge had failed to acknowledge the expense, importance and "other reasons" why the Commonwealth did not plead the risk issue in the arbitration.
370 It was also contended that, in particular, the primary judge failed to consider that during closing oral submissions in the arbitration, Codock abandoned any relief in respect of future Workers Compensation Costs such as a declaration or an order that provision be made for such costs incurred in the future. The Commonwealth submitted that Codock's claim in the arbitration for those costs was thereby reduced
"from something like $15 million to a level involving a relatively small sum in a very complex arbitration involving other claims of tens of millions of dollars."
371 I am prepared to accept that the arbitration was complex. However, the fact that Codock reduced its claim to Workers Compensation Costs that it had actually incurred up to the date of the interim award in December 2005, did not prevent the Arbitrator devoting some 51 pages of his reasons to that issue: see 145-196. During the course of dealing with that issue he also dealt with a significant number of points raised by the Commonwealth for the purpose of resisting Codock's claim for those costs.
372 Although the Commonwealth suggested that the primary judge had not given any reasons as to why, in [24] of the second judgment, he regarded this part of Codock's overhead claim in the arbitration as being of "significance", the obvious answer is that to which I have referred, namely, that it was clearly so considered by the Arbitrator in terms of the extent to which his reasons were devoted to the issue and, in particular, to the significant number of defences raised by the Commonwealth to resist that claim. In any event, as I have noted in [296] above, the Arbitrator awarded Codock the sum of $512,719 plus 7.5% profit with respect to this part of its claim, a not insignificant amount.
373 The Commonwealth also submitted that an Anshun estoppel involved more accurately an extended doctrine of res judicata, or cause of action estoppel, rather than an extension of issue estoppel. His Honour recognised this in [123] of the first judgment. However, I do not see how the question of classification can be relevant to the present issue.
374 Finally, the Commonwealth submitted that his Honour, having recognised in the first judgment at [163] that Anshun estoppel applied where otherwise the bringing of the second action would result in a judgment in conflict with an earlier judgment (a principle that his Honour recognised in [23(4)] and [24(5)] in the second judgment), nevertheless there could be no question of inconsistent judgments in the present case.
375 The relevance of conflicting judgments was referred to in the joint judgment in Anshun at 603-604 in the following terms:
"It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.
…
The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By 'conflicting' judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction."
376 At [163] of the first judgment, where his Honour dealt with a claim by the Commonwealth for an Anshun estoppel against Codock, the claim failed for the reason, amongst others, that no question of inconsistency could arise in respect of the issue in question as it was not a common issue to both sets of proceedings but was "discreet or unique".
377 The issue to which [163] of the first judgment related was a claim by the Commonwealth that Codock was barred from reimbursement of ongoing Workers Compensation Costs by reason of an Anshun estoppel (Question 7 referred to in the Statement of Issues as Issue 7). The issue so raised was based upon the Commonwealth's submission that although Codock had made a claim for relief in respect of expenses incurred after 31 December 1992, that claim was not "dealt with" by the Arbitrator in his interim award of 8 December 1995 and, therefore, fell within cl 1 of his final award and had been dismissed. Alternatively, had the claim not fallen within cl 1 of the final award, nonetheless there would have been an issue estoppel of the extended kind recognised by the High Court in Anshun.
378 However, the claim in respect of which this estoppel was said to have arisen related to Workers Compensation Costs which Codock had not yet incurred at the time of the award. Its claim was for a declaration in respect of the Commonwealth's liability to pay those costs in the future which had been withdrawn by the time of final addresses before the Arbitrator. There had, however, been no withdrawal by Codock of its claim for reimbursement of such costs incurred after 31 December 1992 up to the time of the award.
379 Of greater significance, however, is the fact that Issue 7 was based on par C23 of the Defence to the Summons which provided as follows:
"In further answer to [Codock's] Contentions the [Commonwealth] says:
(a) [Codock's] claim for reimbursement for personal injury costs incurred from October 1995 was put forward by [Codock] for determination in the previous arbitration proceedings between the parties;
(b) [Codock] by its counsel abandoned the claim during the final submissions in the previous arbitration proceedings;
(b1) the claim was dismissed by the arbitrator and the final award of the arbitrator dated 15 May 1997;
(c) in the circumstances [Codock] is estopped from claiming in these proceedings reimbursement for personal injury claim costs incurred from October 1995 onwards on the basis of Anshun principles."
380 In my opinion, the defence in par C23 is significantly different from those raised by the Commonwealth in pars C21 and C24 (the expiration defence), par C29 (the negligence defence) and par C30 (the risk defence). Each of those defences constituted, first, a denial of any liability on the part of the Commonwealth in respect of any Workers Compensation Costs incurred after 31 December 1992 (pars C21 and 24). Second, they amounted to a denial of any costs claimed by Codock arising out of its failure to exercise appropriate standards of skill and care in not providing a safe system of work (par C29). Finally, the defences were also a denial of any loss arising from personal injury claims in respect of which Codock was insured and had claimed reimbursement of the insurance premiums paid in respect of that insurance (par C30).
381 In other words, each of the defences raised in the nominated paragraphs would, if established, constitute a complete defence to Codock's present claim to reimbursement as "overhead" of Workers Compensation Costs incurred by Codock as a class. This would result in a judgment in favour of the Commonwealth, which would be in direct conflict with the Arbitrator's decision that those costs were recoverable as a class.
382 That being so, a judgment upholding any one of the defences referred to would, at the very least, appear to declare a right in respect of the same transaction, being Codock's right to reimbursement of Workers Compensation Costs (considered as a class) under the 1972 TAL. Such a judgment would contradict the Arbitrator's judgment even though not pronounced in the same cause of action in the narrow sense that the particular costs claimed are different although the legal basis for the claim is the same. I would therefore reject the Commonwealth's argument that to allow the subject defences would not, if they or any of them succeeded, result in inconsistent judgments.